Asia Minute: Vietnam Attracting More Foreign Direct Investment
Details are still settling on the first phase of a trade deal between the United States and China. One country that has benefitted from the recent trade tension is Vietnam — and other countries in the region are taking note.
Vietnam is on track to attract nearly 40-billion U.S. dollars in foreign direct investment this year. That word comes from Vietnam’s government — which says it’s the highest inbound investment figure in ten years.
Several factors are driving that increase.
One has to do with the trade tensions between the United States and China. Vietnam has become an alternate manufacturing base for some companies wanting to avoid using factories in China.
That’s not only a political consideration — it also has to do with wages, which are lower in Vietnam.
And money for manufacturing and other projects is coming from elsewhere in the region. This year, South Korea is the country’s biggest source of outside financing — making up more than 20% of all foreign direct investment flowing to Vietnam. Second is Hong Kong — with nearly the same amount.
Singapore, Japan and China round out the top five foreign investors in Vietnam this year. U.S. firms are also increasing their presence in Vietnam — sometimes by way of their suppliers.
Apple’s largest assembly contractor Foxconn has recently increased its presence in Vietnam.
And Forbes reports that a growing number of U.S. makers of mattresses and furniture are shifting production from China to Vietnam.